Case Digest (G.R. No. 212687)
Facts:
Secretary of Finance, Commissioner of Internal Revenue, and Revenue Regional Director, Bureau of Internal Revenue (BIR), Revenue Region No. 12, Bacolod City v. Hon. Renato D. Munez, et al., G.R. No. 212687, July 20, 2022, Supreme Court Second Division, Lazaro-Javier, J., writing for the Court.Petitioners — the Secretary of Finance, the Commissioner of Internal Revenue (CIR) and the Revenue Regional Director of BIR Region No. 12 — sought certiorari under Rule 65 to nullify several orders of the Regional Trial Court (RTC), Branch 60, Cadiz City, in Special Civil Action No. 88‑C. The RTC had (1) issued consolidated orders dated October 22, 2013 granting a writ of preliminary injunction against implementation of Revenue Regulations No. (RR) 13‑2013; (2) approved a P1,000,000.00 surety bond on October 23, 2013; (3) issued the writ of preliminary injunction on October 23, 2013 enjoining respondents from implementing RR 13‑2013; and (4) denied petitioners’ motion for reconsideration on January 14, 2014.
The dispute arose from revenue regulations on the VAT treatment of sugar. In 2008 the BIR promulgated RR 13‑2008, which defined "raw sugar" for VAT purposes by reference to polarimeter readings (less than 99.5) and classification for internal revenue purposes. On September 20, 2013, upon recommendation of the CIR, then-Secretary of Finance Cesar V. Purisima issued RR 13‑2013, which amended Section 2(b) of RR 13‑2008 to define raw sugar as limited to muscovado and declared that centrifugal processes are not "simple," thus removing VAT exemption from sugar produced by centrifugal processes.
On October 3, 2013, several sugar industry associations — Rural Sugar Planters' Association, Northern Negros Planters Association, Confederation of Sugar Producers Associations, United Sugar Producers Federation of the Philippines, National Federation of Sugar Producers (NFSP) — filed SCA No. 88‑C for declaratory relief challenging RR 13‑2013 as unconstitutional (for lack of due process, violation of uniformity of taxation, and inconsistency with Section 109(1)(A) of the National Internal Revenue Code (NIRC) and industry practice). The RTC initially issued a 72‑hour TRO, extended after a summary hearing to cover the period until October 23, 2013, and ultimately granted a writ of preliminary injunction on October 22–23, 2013, preserving the status quo ante pending resolution on the merits and fixing a P1,000,000.00 bond.
Petitioners moved to dissolve the TRO and injunctive relief, invoking the "no injunction" rule in Section 218, NIRC (that no court may grant an injunction to restrain tax collection), asserting lack of jurisdiction, and challenging procedural defects and insufficiency of proof for injunctive relief. The RTC denied reconsideration on January 14, 2014. Petitioners filed the present Rule 65 petition alleging grave abuse of discretion by the trial court.
While the certiorari petition was pending, respondents notified the trial court and this Court that on May 22, 2015 the Department of Finance (upon recommendation of the CIR) issued RR 8‑2015, which again amended RR 13‑2008 to restore a broader definition of "raw cane sugar&qu...(Subscriber-Only)
Issues:
- Is the present Rule 65 petition rendered moot by the issuance of RR 8‑2015, which restored the VAT‑exempt status of raw sugar?
- If not moot, did the RTC commit grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writ of preliminary injunction and related orders (including whether Section 218, NIRC precluded injunction, the propriety of the TRO extension, territorial reach...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)